If Suzette responds to an increase in the interest rate by decreasing her saving, then, for Suzette,
a. the increase in the interest rate creates an income effect that is greater than the substitution effect.
b. the increase in the interest rate creates a substitution effect that is greater than the income effect.
c. consumption when young and consumption when old are perfect substitutes.
d. consumption when young and consumption when old are perfect complements.
a
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Suppose consumers save 5 percent of their incomes. If the government collects 100 dollars in taxes from each taxpayer, private saving will ________ per taxpayer
A) decrease by 95 cents B) decrease by $5 C) increase by $105 D) decrease by $95
The liquidity trap is the
A) vertical portion of the demand curve for money. B) horizontal portion of the demand curve for money. C) vertical portion of the supply curve of money. D) horizontal portion of the supply curve of money. E) vertical portion of the demand curve for investment.
Of the following years, in which was the U.S. unemployment rate the highest?
A. 1982 B. 1960 C. 2015 D. 1990
A utility-maximizing consumer buys so as to make ________ for all pairs of goods.
A. TUx/Px = TUy/Py B. Px(MUx) = Py(MUv) C. MUx = MUy D. MUx/MUy = Px/Py